CBP turns triple play for trade facilitation

Thursday, November 29, 2012

U.S. companies that have been certified as operating secure supply chains could soon achieve faster processing of their international cargo by taking advantage of three new measures unveiled this week by border management officials.
On Tuesday, U.S. Customs and Border Protection announced the addition of six new import processing centers - or virtual ports of entry - organized around specific industries, the expansion of the import-focused Customs-Trade Partnership Against Terrorism into the export realm and the signing of an agreement with Taiwan Customs for each country to accept the security status of approved companies in each other's trusted shipper programs.
CBP Deputy Commissioner David Aguilar, who has actually headed the agency for almost a year in the absence of a permanent political appointee, said during the agency's 12th annual Trade Symposium outside Washington that Customs would begin operating the following industry integration centers in fiscal year 2013:

Agriculture and Prepared Products - Miami.

Apparel, Footwear and Textiles - San Francisco.

Base Metals - Chicago.

Consumer Products and Mass Merchandising - Atlanta.

Industrial and Manufacturing Materials - Buffalo, N.Y.

Machinery - Laredo, Texas.

The six CEEs are in addition to existing ones established in the past year for pharmaceuticals, health and chemicals in New York; electronics in Los Angeles; automotive and aerospace in Detroit; and petroleum, natural gas and minerals in Houston.
The CEEs are part of CBP's enterprise-wide effort to transform trade facilitation and enforcement programs so they are on par with modern business practices, with the goal of reducing transaction costs and enabling companies to respond to fast-changing market conditions.
The centers serve as a single point of processing for importers in CBP's trusted trader programs: C-TPAT and the Importer Self-Assessment, which enables companies with proven internal controls to self-police compliance with trade regulations in exchange for fewer audits.
The industry integration centers handle the entry summary work and perform other activities such as validations, and post-entry amendment and correction reviews. Import documents are routed to the CEEs, but revenue collection and security checks continue to take place the actual ports of entry.
Industry and Customs officials say that giving each center a nationwide reach enables shipments to get the same, consistent treatment regarding product classification or other conditions no matter which physical port they go through. Import experts are trained to understand the normal shipping practices of each industry and can guide personnel at the ports about which shipments to inspect and which to leave alone because they don't pose a risk.
CBP officials a year ago indicated the rollout of new CEEs would take place over a three-year period, but the popularity within the trade community for these import-processing hubs led the agency to adopt a more aggressive schedule.
The news that CBP will begin to build out an export piece for C-TPAT is another item that has been on traders' wish list for a long time. In January, U.S. Customs will begin assessing how well companies in the voluntary program implement their approved security plans for outbound shipments from United States, starting with exports to Japan.
In exchange for demonstrating that they and their suppliers have effective plans for vetting personnel, protecting information technology systems, controlling access to facilities, properly securing containers from infiltrators and other precautions, companies are categorized as lower risk and eligible for fewer security exams, and some other benefits.
CBP has an existing agreement with Japan Customs to mutually recognize companies validated as meeting the standards of C-TPAT and Japan's Authorized Economic Operator program. Until now, the program has been one way, with Japan Customs grading domestic companies and passing the reports to CBP so the shipments receive expedited treatment. CBP could not reciprocate, as envisioned by the standards of the World Customs Organization, because C-TPAT is only an import security program.
In 2011, the United States exported $66 billion worth of goods to Japan, representing about 4 percent of total U.S. exports.
"We expect that this enhanced export process will lead to significant savings for some of our members. We hope by expediting part of the export process we'll be having a direct impact on your bottom line," Aguilar told an audience of about 700 trade professionals and another 200 watching online.
He said CBP intends to expand the C-TPAT export process to other international partners with AEO programs. In addition to Japan, the United States currently has mutual recognition agreements with Canada, New Zealand, South Korea, Jordan and the European Union.
On Monday, CBP and Taiwan Customs recognized the compatibility of their respective cargo security programs under the AEO framework, according to CBP.
Aguilar said the goal is for six of the top 10 export destinations for U.S. products to soon be covered by similar mutual recognition agreements.
Documenting export security practices of C-TPAT members should not be difficult for U.S. Customs because most quality companies use the same procedures for inbound and outbound shipments, Ronald May, the head of the C-TPAT field office in Buffalo, said. CBP already captures most of the information about the company during visits to a company's headquarters and main warehouse, now will set up a formal process to report that information as it relates to exports.
"We don't think it should be a heavy lift. It's something we can incorporate rather quickly," he said during a separate panel discussion.
CBP tested the export validation process with Garmin and Boeing, he said.
Companies should not experience much additional cost because they likely don't have to do anything beyond what they normally do to secure their premises, personnel and conveyances, May added. The only difference may involve some additional paperwork.
CBP doesn't envision doing full-scale validations for existing C-TPAT members who choose to add an export certification, but rather will do export reviews as part of the regular revalidation process conducted every few years, May said.
The agency also plans to develop protocols for companies predominantly engaged in export activity that only want to join C-TPAT for the export benefits, he said. - Eric Kulisch